Selling a House in Probate

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Selling a House in Probate

Selling a house undergoing the probate process is by no means easy. There are so many legal processes that the property should go through before it can be listed as a probate sale. Even after the property is sold to the highest bidder, there is still paperwork to accomplish.

Selling a probate property is done through four steps: appointing an executor or administrator, having the property appraised, petitioning the court to begin the sale and listing the property, and asking the court for sale approval. The probate sale is long and arduous. It doesn’t also guarantee that the family members would receive a hefty amount, especially if the deceased owner has a lot of debts.

Whether you are an executor who needs guidance on the probate process or simply a relative who would benefit from the sale, you’ll find this guide useful.

Here, we have detailed everything you need to know about selling a probate property— from the core steps to help you get started to handling property repairs and probate sale approval. Note that probate differs state to state, so we recommend seeking professional guidance if you need specific information in your state.

What is a Probate Property?

selling a house in probate

Probate property is an asset left by someone who died that has to go through the probate process. This property is either distributed through a will or without a will (in case someone died intestate). 

While the term “probate property” often means a probate house, it is essential to understand that it can also mean other assets such as cars, stocks, jewelry, etc.

For the purpose of this article, however, we will be focusing on selling probate houses.

Can a House Be Sold While in Probate?

Yes. A house can be sold while in the probate process. Probate houses are sold the same way as traditional houses— typically through a real estate agent with the same marketing strategies or a cash buyer if you’re looking for a faster, hassle free probate sale.

However, selling a probate property is a complicated process. The money from the sales of assets may not be distributed exactly as the family would expect, especially if the deceased owner owes debts to a lot of creditors.

The probate expenses, estate debts, and insurance fees would also be deducted from the sales of the property before the heirs can divide the money for themselves.

How Does a Probate Sale Work?

probate sale

As established earlier, a probate sale is somewhat similar to selling traditional property but with more complexities. Often, a probate sale is pushed back a couple of times because the court is involved in approving the probate sale. Therefore, it could extend from months to years.

Nevertheless, if you are ready to embark on this journey of selling a house in probate, here are some of the basics to know… 

Before the sales begin, the court determines if the probate is formal or informal. These two types of processes indicate whether the court would be involved in every step of the sales or not.

Formal Probate Sale

The formal probate process is lengthy and complicated because of court involvement. The probate court should approve every transaction related to the house and the executor needs an attorney for guidance.

Here are 4 steps to help you get started:

1. Appointment of Executor

A vital part of selling a probate house is appointing an executor or a personal representative. If the deceased individual indicated an executor on his will, the court would honor this.

Meanwhile, if an executor is not appointed, the court will assign someone as an administrator to process the documents. This person is preferably the next of kin. 

The task of an executor is difficult. To illustrate, the executor would oversee the appraisal, marketing, sales of the house, paying probate fees, dividing proceeds, etc

2. Real Estate Appraisal

Once appointed, the executor would have to get the house appraised so it can be listed for sale. 

The appraiser must really be a professional because the process is stringent. This is to be expected since the appraisal would serve as the basis of the property’s asking price.

Moreover, most probate courts require the property to be sold for at least 90% of its appraised value.

3. Petition to Begin the Sale and Listing

When the home’s appraisal is ready, the executor or personal representative should go to the probate court and file an intention to sell the house and other assets.

The intention filed should include the home’s appraisal and the method chosen to sell the property, for instance, auction or market sale, through the help of agents.

Once the petition is approved, the executor can start listing the house for sale. The property can be sold through distressed property buyers, for sale by the owner or independently, or a realtor who is an expert in probate sales.

When a buyer takes interest, they should be informed by the executor that the sale will only be completed after the court’s confirmation.

A hearing would take place before the approval of the sale. But before the schedule of the hearing, the probate house can still be advertised, mentioning the buyer’s offer. This would allow more potential buyers to bid during the court hearing.

4. Court Hearing and Approval of Sale

selling a probate property

During the court hearing, when some more potential buyers show up to bid, the probate court will take charge. They will facilitate the bidding and overbidding.

Since the court will handle this part of the sale, expect that there would be strict rules.

After a buyer/bidder has won the bidding, the executor can petition the court to authorize the sale of the property. 

The beneficiaries or heirs of the sale should also be notified regarding the sale and they should give their consent. If anyone of the heirs object, the sale may not push through.

Once all the documents have been prepared, the court will review them and release an order to approve the sale.

Informal Probate Process

The informal probate sale process is less stringent than the formal probate sale because there is limited court involvement. This is possible if the house in question is under the joint tenancy and there are rights to survivorship.

1. Appointment of Executor

Similar to the formal probate sale process, an executor or personal representative would be appointed to take charge of the transactions. If the executor is not indicated, the court will appoint an administrator. The executor would no longer need the help of an attorney in most cases.

2. Filing of Probate Forms

The executor should complete and file all the necessary probate forms with the probate court. These forms are often different from the ones filed during formal probate sales.

3. Issuance of Letters of Testamentary

Right after the primary forms are filed, the court would release Letters of Testamentary. These are documents that give the executor the right to manage the assets of the deceased, including the house.

The executor would still need to fill out a lot of forms and file them with the probate court after these documents are released.

4. Listing the House for Sale

When the court already permits the sale of the house, the executor can now list it or sell it however he wants as long as it is legal. The executor can seek the help of agents or find a company that buys probate houses.

There would be no bidding involved because the court would no longer interfere with the transaction. However, the beneficiaries or the parties involved should all agree before the sale can proceed.

3 Ways to Sell a Probate Property

sell probate property

If the court approves the petition to sell the probate house, the executor must start marketing it. Here are several ways to sell a house going through probate faster:

Probate Real Estate Agents

Working with realtors specializing in probate properties can speed up the process.

They already know what strategies to use to sell a house under probate and how to price the property right. They also know who to market the property to, so you’ll get a competitive offer.

Real Estate Investor

Real estate investors buy and renovate properties so they can convert them into rentals or fix them up to sell on the market. Investors may secure a bank loan or mortgage for a probate property if they’re really interested in it. They may also pay in cash if they have enough funds.

Cash Home Buyer

A cash home buyer is pretty similar to a real estate investor. However, they’re more ideal because they can offer cash for the probate property right away.

They don’t take loans or mortgages to pay for the property. They don’t require any repairs. Also, a trusted cash buyer will not withdraw from the sale once they have agreed with the executor, so you get your money with no uncertainties.

How Long Does a Probate Sale Take?

According to California Courts, probate sales last 9 months to 1 ½ years due to a lot of factors. For one, asking for a schedule in a probate court is difficult. There’s also the delayed release of the grant to probate, which can further push back the transaction.

Another aspect to look into is the marketing part of the probate sale. If the executor lists the house for sale, it doesn’t mean that a buyer will take interest right away unless an expert realtor is hired or the property is sold to an investor.

Typically, it could take months or even years before a buyer comes forward, depending on the state of the property, the asking price, and the real estate market in the area.

That said, it is best to expect that the probate sale will take longer than traditional house sales. However, a reputable cash buyer is a great way to speed up a probate sale.

What if the Probate Property Needs Repairs?

can a house be sold while in probate

A probate property typically needs some repairs before it can be marketed by the executor or real estate agent. The expenses should be shouldered by the executor and the relatives so the house can be marketed at a competitive price.

In cases where the relatives do not agree to pay for the repairs or cannot afford them, the executor could find a company that buys houses for cash instead of a real estate agent because cash buying companies do not require repairs of cleaning before the probate sale.

You could also list the house as a distressed property. However, you can save on the real estate agent fee by seeking out cash buyers directly. 

Final Thoughts: Selling a Probate Property

We hope that through reading this guide, questions like “Can a house be sold while in probate?” or “Do the beneficiaries get all the proceeds of the sale?” were answered.

Generally, in selling a house or any property going through probate, you should prepare both emotionally and financially. It would test your patience since the process is arduous and will also challenge your financial capabilities due to expensive probate fees.

It’s best to seek the help of an attorney if you really need legal advice on the nuances of probate law. Moreover, there are also specialized agents that can help you get started in selling a probate house.

If you decide to go the cash home buyer route, contact us here at Sell My House Fast. We’ll give you a competitive cash offer and cover the closing costs for your probate house! Call us at (844) 207-0788‪ if you want to sell simply.


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Author: Andy Kolodgie

Andy Kolodgie is an experienced real estate investor with a network that expands nationwide. As owner of Sell My House Fast, Andy’s goal is to provide home sellers with more options to their real estate problems than a traditional home sale. He’s been featured on multiple publications including Yahoo Finance, MSN, HomeLight, Credit.com, Apartment Therapy, Business.com, LegalZoom, Zolo, and Creditcards.com.

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